For more than six years, the city of Dana Point and residents along the coast have tried to hash out a workable solution for short-term vacation rentals in town.

The issue has been a source of contention as it pits the rights of property owners against the rights of residents to live in peace, free from disturbances. On one end of the spectrum, you have people such as longtime Beach Road resident Charlie Hoose, who say the excessive number of vacationers degrades their quality of life.

For Hoose, living next to rental properties has been a never-ending nuisance of strangers who do not respect residents. He said renters leave behind excess trash, create roadway congestion and violate noise regulations. Hoose has been dealing with this for a decade, he said.

"I don't think you should subject the residential property owner to that kind of abuse," he said. "Would you want a vacation rental next to you?"

On the other end of the spectrum there are rental owners such as Jeff Perry, who argue that not only have they had good experiences with renters, but it's also their right as property owners to rent out their condos, especially when it helps offset the cost for many owners.

Perry said he doesn't agree with the idea that rentals degrade the quality of life because the city is, and always has been, a vacation destination.

Perry grew up in San Juan Capistrano. He bought a Dana Point condo in 2007 for personal use but started renting it out to help offset the cost, he said. Perry now owns Vacation Concierge, a business to help people manage their rental properties.

Both sides have been at an impasse for years, unable, or unwilling, to find a compromise. Hoose said there can be no compromise because residential and commercial use are not compatible. The situation is further complicated by the fact that the city's municipal code does not mention short-term vacation rentals.

Dana Point operates under a permissive municipal code – meaning things are assumed to be illegal unless they are specified – and as there is no mention of these rentals, they are technically not allowed. Despite this, there are between 250 and 300 active rentals in Dana Point, according estimates in a Feb. 5 City Council report.

This only fuels the opposition to short-term rentals. The municipal code doesn't allow for short-term rentals, so the argument is moot, Hoose said. Hoose grew up on Balboa Island and said he saw renters ruin the area. He has been vocal about Dana Point's failure to crack down on short-term rentals because he believes allowing them will eventually ruin this city, too, he said.

But after dragging its feet since 2007, the City Council voted March 5 to push forward an ordinance to amend the city code and allow short-term rentals with an approved permit.

The ordinance requires rental property owners to apply for an annual permit with the city and implements regulations properties must adhere to – including property inspection and occupant limitations. Most notably it applies the city's transient occupancy tax, a 10 percent tax to the rent charged to vacationers.

City Manager Doug Chotkevys said the lack of renting standards in the past created confusion and the ordinance will provide much-needed clarity.

"Basically our intent, and I think the council's intent, is to create a set of rules that allow these businesses to operate in a quiet and respectful manner for these neighbors," he said. "The thing I appreciate is that we finally have rules, by which everyone can operate."

But the city isn't just getting a set of rules, it also stands to make at least $400,000 a year in tax revenue. That figure is a conservative estimate because it is only based on the rentals city officials found advertised online, according to their report.

New rules needed?

Perry said he is glad the city is finally committing to allow short-term vacation rentals and thinks it is the right step toward a solution for everyone.

But there are city officials and residents, some even in favor of the rentals, at odds with the ordinance, arguing the city already has the rules it needs.

Instead of creating a new ordinance to control rentals, the city can accomplish the same goal by enforcing its existing regulations, Councilman Carlos Olvera said.

Chapter 6.14 of the municipal code covers public nuisances, which includes noise, trash and other issues raised by those who oppose vacation rentals.

Tom Barnes, who has been renting out his condo in Niguel Beach Terrace for seven years, said the ordinance is a waste of time.

"I think this whole thing is basically city bureaucracy in search of a problem," said Barnes, who believes everybody should just be expected to follow the existing rules.

MAKING MONEY

The $400,000 that the city would make from a transient tax is a clear motivator to some like Hoose.

"It's pretty simple; it's a lot of money," he said. "It seems to me from Day One the city staff had a one-track mind on it: They saw the revenue stream that could be developed."

The city plans to use the revenue to help pay for a new position to operate the permit process, officials say. Salary estimates for this position are $76,886 for the first year and $54,480 each subsequent year.

The money remaining would go into the city's general tax fund, which the council uses for general upkeep, Chotkevys said.

But with $30 million of revenue projected for the 2013 general fund, Dana Point doesn't need the money, so there's no reason to create a permit process and impose the tax on rental properties, Olvera said.

Adding that tax could mean lower revenues for owners and fewer renters, which could force some people to sell their property, Barnes said.

The permit will be impossible to enforce, which will leave residents in the same position – forced to deal with the nuisance of renters, Hoose said. And Olvera said the tax could encourage rental owners to stay off the radar to avoid filing for a permit.

Enforcement doesn't need to become a complicated issue, because it will happen with the help of residents, Chotkevys said.

"We don't have a heavy-handed police atmosphere here," Chotkevys said. "If we get complaints then we'll take action, but we're not going to be driving around looking for people to prosecute."

If the city discovers people renting without a permit, officials will inform them of their requirements. Chotkevys said he's confident people will comply.

Olvera said this turn-a-blind-eye mentality reinforces his view: The ordinance is unnecessary.

"That's kind of what we're doing now," Olvera said. "So why do we create a new ordinance where we might want to look the other way if there's no problem?"

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